Enterprise Management Systems Implementation
- Justifying the Investment
- Implementing, Using a Participative Approach
- Components of Enterprise Systems
- Selecting and Developing the Best System
- Manufacturing Systems Within a Quality Context
Implementation of Enterprise Systems (Enterprise Resource Planning) continues to be one of the most difficult challenges facing manufacturers today. Research has shown that even today, over 60% of all Enterprise System implementations fail to achieve the benefits that justified their purchase.
Because of the large number of manufacturing and data processing considerations, many enterprises have sought guidance from advisors with proven experience and track records. We understand the problems involved with selecting and implementing Enterprise Systems and how to resolve them.
It is our experience that there are four main steps to successful implementations and re-implementations of Enterprise Systems.
- Justifying the investment
- Selecting and developing the best system
- Implementing, using a participative approach.
This page outlines how our services will help you in these areas.
2. Justifying the Investment
Enterprise Systems are an investment in improving business processes and, therefore, competitiveness. Like all strategic investments, they should enhance a company’s profitability and provide a satisfactory return on investment. It is for this reason that justification is often a key step in establishing management commitment. An important element of this process is educating management on how Enterprise Systems can help your company achieve its long-term profitability goals by: improving customer service, reducing cycle time, improving asset utilization and operational efficiency, reducing inventory levels, increasing inventory turnover, reducing manufacturing costs. We can provide various education sessions to help management identify the areas where Enterprise Systems will and will not improve performance. We can also show you how to quantify implementation costs, potential savings, and other benefits using our Cost/Benefit Analysis methodology.
The effectiveness of Enterprise Systems is dependent on the accuracy of the data and standards used by the system. Chances are the standards and data used in your current system requires improvement. By addressing these and other fundamental issues at an early stage, you can minimize your implementation time and ensure success. We have the experience and methodologies to help your company address these issues.
Poor inventory accuracy, product structure and routing accuracy often result in the failure of manufacturing system implementations. AMGI provides an Data Accuracy Methodology to guide teams of your employees to improve data accuracy in problem areas prior to implementation.
Production Standards are an integral part of Enterprise Systems. We can assist your company in the development of these standards by training your staff in the use of work measurement techniques. Such techniques are easy to use and provide you with a cost effective approach for developing reliable standards.
Other Key Preparation Areas
Demand forecasting, shop floor reporting, costing system design, group technology development and service level setting are some additional areas where preparation projects are often necessary.
4. Implementing Using a Participative Approach
The most important part of the implementation of Enterprise Systems is people. It is their effort and commitment that will make a system work. It is for this reason that our approach is based upon the transfer of knowledge to your people. Working with management and staff, we can help you to educate your staff, positively reinforce their efforts, develop an implementation plan, and manage the project.
Education and Training
Education and training are critical to the successful implementation of Enterprise Systems. This spans from strategic workshops on the fundamentals of MRP II and ERP to the essential mechanics of each element. Not only does education provide employees with the knowledge and tools to do their job, but, done properly, it can reduce resistance to change. Our experience is that companies usually under-estimate the amount of education and training required. We can provide a series of workshops to address the business issues related to manufacturing systems implementation.
People must work towards specific objectives. Therefore, performance measures must be clearly defined for key aspects of business processes impacted by the systems. We can assist in developing performance measures which can be used to monitor success in terms of the benefits used for justifying the investment.
Identifying the right project manager and assembling the team members are critical to successful implementation. To get their commitment to the project, they must believe that the goals and objectives of the project are realistic. Therefore, it is they who must develop the implementation plan. We can work with your project team to:
- Identify and understand technical issues that must be addressed
- Determine the required activities and resources
- Estimate completion dates for the activities
A common element to all Enterprise System implementations is that people must change the way they work. Resistance, poor communication, turf guarding, low commitment, and non-supportive behavior are significant causes of implementation failure. These must be overcome through effective project management. We can work with your steering committee and project manager to address the following human aspects of Enterprise System implementations:
- Organizational design
- Project communication
- team building
- Conflict resolution
5. Components of Enterprise Systems
Enterprise Systems have many components. Deciding which components are appropriate for your company requires an understanding of both business and technical issues. We have the experience to help you with this decision. The following diagram illustrates the components and scope of a very comprehensive Enterprise System. You must consider which components are required to meet your needs.
The heart of most Enterprise Systems is Manufacturing Resource Planning or Enterprise Resource Planning (often referred to as MRP II). MRP II is an integrated planning and control system which simulates the manufacturing process to provide management with decision information critical to effective utilization of materials, manpower and facilities.
6. Selecting and Developing the Best System
Choosing the best Enterprise System for your company is no easy task. It requires an up-front investment of time and effort. Often companies fail to make this investment for the sake of expediency, or to save selection costs. This usually results in systems which are not well suited for the company, late, ineffective, and over budget. There are four basic steps which can help avoid this situation. We have the experience to help you perform each of them right.
Planning for Enterprise Systems must begin with the company’s strategic plan. We can work with you to assess:
- The impact of introducing Enterprise Systems into your business environment
- Where Enterprise Systems support achievement of your strategic plan
- Which systems are appropriate for your company, based on our knowledge of recent trends, computer hardware, and available software packages.
The output of this process is a conceptual system design, identifying which of the components (illustrated above) are required by your company.
Commitment at all levels of an organization is fundamental to success. Therefore, it is important that your people are involved at an early stage. Using the conceptual design of your system as a framework, we can work with your management and staff to develop the details of your company’s needs. This process involves:
- Obtaining agreement on the nature of your key business processes
- Identifying activities supporting key business processes
- Determining the functionality required to support activities
The output of this process is a statement of the company’s critical needs, expressed in clear and specific terms.
We can help you structure a request for proposal (RFP) detailing your requirements to appropriate software vendors. It will ensure that a clear response is made to each of your requirements. We can then train your team on how to evaluate and choose the best match using a structured methodology to evaluate vendors and their software. In addition, we can advise you on how to negotiate the best contract terms with a vendor.
Detailed System Design
Since every company is different, it is likely that no software system will meet all your requirements exactly. You may need to have modifications made to the software of develop compensating controls and procedures. We can assist your company in both areas by helping you to specify and test vendor software modifications and providing skills training and coaching for people to develop policies and procedures.
7. Manufacturing Systems Within a Quality Context.
Companies can find that manual and computerized systems alike do not effectively support the business processes. Symptoms of this situation include decreases in productivity, expediting, dwindling employee morale, and possible lower customer service. These symptoms may indicate the need for a new system. However, in many cases, they also indicate that a company does not have the capacity to monitor its processes to ensure that they are effective and properly executed. The purpose of any system is to enhance the performance of certain business processes. Effective quality management can ensure that business processes are continually improved to meet needs. By focusing on their customers, companies can ensure that their business processes evolve to help them become more competitive. AMGI has been providing a range of Enterprise Systems services to clients from various industry sectors always taking a pragmatic approach. This same experience, together with our quality management tools, ensure the necessary degree of culture change inherent to a successful manufacturing system implementation.